-5'3'S'5> 
 
 ADDRESS DELIVERED BY SAMUEL SPENCER. 
 
 Mr. President and Members of the 
 
 National Association of Manufacturers : 
 
 It has frequently been said that this is essentially an age 
 of industry. Certainly within the past generation there 
 has been greater industrial progress, greater growth 
 and diffusion of wealth than in any other period of his- 
 tory. In this activity the United States has taken the 
 lead of the world. The requirements of this development 
 and the consequent advancement of the arts of civilization 
 have been beyond the powers, physical and pecuniary, of 
 the individual or the co-partnership under which the industrial 
 and commercial enterprises had previously been conducted. 
 The formation of corporations to take the place of the 
 individual or copartnership, and the subsequent combination 
 of many of these corporations into still larger ones, have 
 been the conspicuous and characteristic features of this evo- 
 lution. Ours is not only an age of industry, but it is the age 
 of the industrial corporation suddenly and enormously devel- 
 oped. 
 
 The process has gone on so rapidly and to an extent so vast 
 that the imagination, especially of those who have not 
 actively participated in the transformation, has been be- 
 wildered. Mere size in these corporations has on occasion 
 been construed as necessarily meaning wickedness and cor- 
 ruption. The mere failure to comprehend has, in many in- 
 stances, been the cause of unmerited condemnation. 
 
 Legislation has been continuously proposed, and to an ex- 
 tent enacted, to control or to regulate the formation and the 
 operations of these corporations. 
 
 £ Such legislation was first directed against corporations 
 engaged in the business of common carriers. This was 
 iu natural, because the business of common carriers upon a 
 large scale in this country, necessarily from the beginning 
 has been conducted by corporations, instead of by individ- 
 uals or firms, and because the common carriers performing 
 quasi-public service, were, properly amenable to governmen- 
 
2 
 
 tal supervision and regulation. Legislation in respect of 
 the industrial corporation, embracing now so largely the 
 manufacturing and commercial interests of the United States, 
 came later. 
 
 The Act to Regulate Commerce, passed by Congress in 
 1887, was directed towards the regulation of a certain class 
 of common carriers. The Anti-Trust Act of 1890, known as 
 the Sherman Anti Trust Law, was supposed at the time of 
 its passage to be directed solely against the so-called trusts 
 or large corporations or combinations engaged in indus- 
 trial pursuits other than that of transportation. The two 
 acts w r ere intended to deal severally, one with the func- 
 tion of transportation conducted by common carriers by rail ; 
 the other with the manufacture and sale of commodities. 
 
 It has since been determined by judicial decree that both 
 acts apply to the common carrier, with the anomalous and 
 confusing result that if the carrier obey one law he runs the 
 risk of disobeying the other. The only way he can establish 
 that uniformity and stability in rates demanded by the one 
 law is to adopt concurrent action which may be forbidden by 
 the other. 
 
 The Act of 1890 was intended not to control or regulate, 
 but practically to suppress the growth of the industrial corpo- 
 rations. 
 
 Perhaps the most striking feature of industrial conditions 
 since its enactment has been the continuous and enormous 
 increase in the number of such corporations, their almost 
 uninterrupted growth in wealth and efficiency and their com- 
 bination into larger units. 
 
 Instead of being suppressed, these powerful agencies for 
 economy and usefulness have grown until they practically 
 represent the progressive industry of the country. 
 
 Industry and commerce are now carried on to such an 
 extent by these agencies that discussion has sometimes 
 become rife as to whether the growth of corporate influence 
 and power does not menace the very foundations of the 
 Government. 
 
 It has been suggested that this tendency of the age 
 
3 
 
 means the decay of the individual under the blighting 
 shadow of the corporation ; that individual effort and am- 
 bition are being lessened and the quality of citizenship is 
 suffering in the process ; that that mainspring of individual 
 effort, the opportunity to own property, and to direct its 
 operations and enjoy its fruits, is being dangerously dimin- 
 ished as a factor in our national existence ; that the artificial 
 citizen is taking the place of the natural; that freedom of 
 individual choice and individual action and enterprise in 
 business may soon be a thing of the past. This view is based, 
 of course, upon the fact that many firms and individuals 
 have changed the form of their business into that of a cor- 
 poration ; that many who created, owned, and personally 
 directed small enterprises have now become merely silent 
 investors in the larger organizations of which those enter- 
 prises have become part. I have no doubt, a majority of 
 the corporate organizations represented in the Manufac- 
 turers’ Association have been built up by this process. 
 
 We cannot ascribe to the idiosyncrasies of a period, this 
 wide-spread tendency towards corporate management. While 
 the change from individual to corporate direction of indus- 
 try may, in some cases, be due to force of circumstances, 
 contrary to the preference of the individual, there are tew 
 exceptions to the rule that the change has been the result of 
 that individual choice which is the very essence of industrial 
 and commercial freedom. In such a process, if the individual 
 has suffered, he has done so in the exercise of his own judg- 
 ment, and in the pursuit of his interest as his interest then 
 appeared. 
 
 On the other hand, the man or men of the greatest individ- 
 uality, the greatest commercial force, have remained to direct 
 the corporations, and the men of superior judgment, force 
 and skill are finding wider scope for their individuality and 
 activity than ever before. It has been aptly said that the 
 corporation is but the individual expanded. 
 
 Whether business be conducted by a person, a firm, or a 
 corporation large or small, it is the ambition, the enterprise 
 and the achievement of the individual that make it successful. 
 
 This is in accordance with the laws of nature, the laws of 
 
4 
 
 trade, and is necessary for commercial progress. No legis- 
 lation for governmental direction or control can affect the 
 operation of these laws except to repress activity, to circum- 
 scribe commercial growth, and thus, if not to bring disaster, 
 at least to lessen that degree of prosperity which we have 
 now attained, and to limit that greater field of achieve- 
 ment which we are otherwise destined to occupy. 
 
 The spirit of industrial and commercial combination, 
 founded on the fundamental laws of economy of produc- 
 tion and of cheaper distribution, can never suppress or 
 diminish the personal activity of any citizen, except of one 
 whose natural limitations disqualify him for successful com- 
 petition with his superior neighbor. So long as that compe- 
 tition is fair and legal, the individual cannot unduly suffer. 
 It is the part of the Government, of course, to see that the 
 field of competition is kept open equally to all, but it is 
 not its province to bolster up the fortunes or even 
 the opportunities of one against the other. Freedom of 
 endeavor fosters the growth of the individual, whether he 
 chooses to conduct his business personally or transfer it 
 to a corporation. On the other hand, there is nothing 
 which so weakens the fibre of individuality as reliance upon 
 paternalism, whether governmental or otherwise, for sup- 
 port in the struggles of life in which manhood is built up 
 and on which all true success depends. 
 
 If we must choose between the possible weakening of the 
 less competent by transfer of activity from the individual to the 
 corporation, and the weakening of all individuals, even the 
 most capable, through socialism or governmental paternalism, 
 surely the part of wisdom will be to choose the former, and to 
 thus continue the free exercise of individual choice and of the 
 legitimate laws of trade and commerce upon which all of the 
 substantial and useful growth of the world’s industries has thus 
 far been based. 
 
 Yet recent tendencies in our legislation seem to threaten 
 this danger of sapping the strength and the courage and the 
 enterprise of the individual citizen. Socialism is stalking 
 abroad, and the possibility of its entrance in our national life 
 clearly and distinctly confronts us. 
 
5 
 
 The recently proposed legislation in respect to fixing rates 
 of transportation by the United States Government through 
 one Commission for the entire country may be a most signi- 
 ficant beginning. It is true the proposition is put forward, not 
 with the avowed purpose to fix and establish the prices at 
 which transportation is to be sold, but under the guise of the 
 correction of abuses, by granting power to the Commission 
 to substitute in a particular case a rate or price which, in the 
 judgment of the Commission is just or reasonable in the 
 place of one judged by it to be unjust or unreasonable. 
 
 This would be akin to the Government saying to manu- 
 facturers that you are charging an extortionate price 
 for a product and must hereafter charge only a lesser 
 price to be fixed through Commission or otherwise. If 
 the Department of Commerce and Labor were clothed with 
 power to set aside the price of one article which it regarded 
 as extortionate, and substitute therefor a lower one, would 
 not that be the power to ultimately fix the prices of all your 
 products ? The right to name one price is, of course, the right 
 in the end to name all, and the right to name all may mean, if 
 the pow T er be used, the absolute suppression of that enterprise 
 which now finds its most beneficent activity in conducting the 
 great and ramifying industrial interests of this country, re- 
 strained only by the Constitution and the common law and 
 the great natural laws of trade. 
 
 I am not denying the power or the right or the policy 
 of governmental regulation by proper and safe methods of 
 the performance by the railways of their public duties. 
 
 To correct abuses is one thing, to supervise and direct 
 the earning power or the operations of a business of what- 
 ever character is quite another. 
 
 I am only pointing out that if the Government in its reg- 
 ulation of common carriers, shall go beyond the point of 
 correcting well-defined abuses and unjust discrimination, 
 it may unintentionally, possibly unconsciously, be enter- 
 ing upon a policy of governmental paternalism, from which 
 retreat will be difficult if not impossible. 
 
6 
 
 If it shall do so, what assurance can there be that the next 
 step in such a policy may not be similar action in estab- 
 lishing the prices at which manufactured articles shall be 
 sold. 
 
 It has been repeatedly charged that the Interstate Com- 
 merce Act has failed in its purpose for the suppression of re- 
 bates and unjust discriminations, and it is argued therefrom 
 that additional power, the power to fix future rates should be 
 granted to the Commission. It may be true that the rebates and 
 unjust discriminations have not entirely disappeared, although 
 they have been enormously diminished. It is also true that 
 the power, ample under existing law for their suppression, 
 has not been fully used, and it is equally true that the meas- 
 ures recently proposed will, if adopted, have absolutely no 
 effect as a remedy for these evils. If such legislation be en- 
 acted, the first and possibly fatal step in industrial paternal- 
 ism will have been taken, whilst the evils urged as an argu- 
 ment for it may still remain uncorrected. 
 
 The case of the manufacturer and the merchant under the 
 Anti-Trust Law of 1890 may not at all be dissimilar. The 
 purpose for which the Act was passed, the suppression of the 
 so-called trusts, has certainly not been accomplished. The 
 real remedy, the application to the courts, and the detection 
 and punishment of violators of the law, has no more been 
 applied under the Anti-Trust Law against the commercial 
 and industrial corporations, than it has been against the rail- 
 way carriers under the Act to Regulate Commerce. Industrial 
 corporations have grown and prospered, and prices of com- 
 modities have risen to an extent far greater than have the 
 prices for transportation. May not the corporate manufac- 
 turer or the corporate merchant be confronting, in the near 
 future, the same problem with which the carriers have been 
 brought face to face, namely, suggested additional legisla- 
 tion on the plea that existing legislation has not accomplished 
 its purpose? If so, if the precedent is established that a Com- 
 mission shall make rates for the railways, may not the 
 equally illogical and harmful step follow that the Government 
 shall make prices for the manufacturer and the merchant ? 
 
7 
 
 The remedy for corporate evils lies not in suppression nor 
 in undue governmental regulation or governmental control. 
 Suppression by statute has been tried, and has failed. Gov- 
 ernmental regulation beyond the limits of correcting irreg- 
 ularities and abuses, means a paternalism which will sap not 
 only the energies and initiative of the individual, but must 
 retard the development of the country, and may possibly 
 threaten the foundations upon which free Government is 
 based. 
 
 The remedy lies in an intelligent and thorough recognition 
 of the benefits to be derived from large corporate instead of 
 small individual activity; it lies in throwing the searchlight of 
 public knowledge and public scrutiny upon all corporate 
 action and methods which can, by illegal abuses and discrim- 
 inations, inflict injury and injustice upon others of equal rights; 
 it lies in wise and judicious laws in respect to the formation 
 of corporations, the amount and character of their capitaliza- 
 tion and the scope of their corporate powers, and in a system of 
 governmental supervision and inspection which can success- 
 fulfy detect and punish all infractions of the law. 
 
 It lies not in the restriction of the earning power or the 
 profits of corporations thus formed or thus supervised. The 
 profits of corporations, legitimately organized, and legally 
 and honestly conducted, should be no more restricted by gov- 
 ernmental action than the profits of the individual engaged in 
 similar pursuits. 
 
 Under such conditions, and they are easily attainable, the 
 well-managed corporation has great usefulness for the good 
 of the individual citizen and of the entire country, and in it 
 there is no menace to the structure of our free institutions. 
 
 The corporate citizen should be treated as is the natural 
 citizen. Its crimes or misdemeanors or irregularities should 
 be exposed and punished or corrected, but its energies and 
 capacity for development should be encouraged by that free- 
 dom of opportunity and effort which under our free institu- 
 tions is guaranteed to all. 
 
 We should learn, as we shall, to disregard the question of 
 mere size, and to look at the substance, the character and the 
 
8 
 
 actual doings of the corporations, and when this is accom- 
 plished, corporate management as contrasted with that of the 
 individual will cease to be a bugbear. 
 
 We have successfully grappled many times in the past with 
 difficult and perplexing problems, both political and economic. 
 
 Our forefathers were pioneers in the establishment, under 
 new and untried and often discouraging conditions, of a gov- 
 ernment of the best and most beneficent character. They 
 were pioneers in the settlement and development of the 
 wealthiest of continents. Almost within our own generation 
 we have been the pioneers in the creation of a system of 
 national transportation, over the largest areas, affording the 
 lowest rates, and the highest efficiency which the world has ever 
 known. Within the memory of those now here we have met 
 and permanently solved the conflicting questions of national 
 finance, which at times threatened the national credit, if not 
 the national integrity. 
 
 In all the crises which have yet arisen the sound common 
 sense and conservative character of the American people have 
 ultimately triumphed, and the nation has been safely guided 
 through the impending dangers. 
 
 The irresistible march of commercial progress, has now 
 made us the pioneers of the world, in the creation and de- 
 velopment and management of the largest industrial organi- 
 zations ever known, with the beneficent result that their pro- 
 ducts are more cheaply produced, and are more widely and 
 more bountifully distributed than ever before. Great as may 
 be the responsibility which this entails, the American people 
 as they always have been, will be equal to a wise and conser- 
 vative solution of the problem, without loss of individuality 
 in the citizen, without menace to the free institutions of our 
 country as bequeathed to us by our forefathers, and yet with- 
 out resorting to the dwarfing effect of governmental paternal- 
 ism, or the fatal follies of socialism.